What is a economic definition of substitutes?

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2026-05-13 20:45

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A substitute is a product that can be used instead of another product but still has the same function/ purpose. For example, American cars and Japanese cars could be considered substitutes for one another. If the price of Japanese cars increases, the demand for American cars would increase because people want to spend less money. If the price of Japanese cars decreased, the demand for American cars would decrease because people would want to purchase the less expensive one.

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